Around 20 percent of Snap's 6,400 employees are bound be laid off starting on Wednesday, according to the The Verge. Reports said that some departments will be hit harder.
One of the departments that will be severely affected is the team working on ways for developers to build mini apps and games within Snapchat, as per Engadget.
The social mapping app Zenly, which Snap acquired in 2017 and has since kept running independently, will also suffer from the layoff.
Snap is Laying Off Employees Due to Rough Times
Snap is preparing to let go 20 percent of its employees on Wednesday due to the rough times that the company is experiencing.
The year has been particularly difficult for Snap. Due to a wider economic slowdown that impacted many tech companies including Snap, the company's stock fall by 80 percent since January.
Snap reported a revenue of $1.11 billion, and a net loss of $422 million for Q2. Based on the earning result for the Q2, Snap exhibited a weak earning and its stock dropped by 40 percent.
With this, the company said that it would look for ways cut costs while "bringing in fewer new hires."
According to the company, it intends to "substantially slow our rate of hiring, as well as the rate of operating expense growth."
Snap also said that the company will prioritize its investments and "drive a renewed focus on productivity."
Meanwhile, according to the company, they will not be providing guidance for Q3 earnings, citing "uncertainties related to the operating environment."
Read Also: Lyft, Uber Cut Back on New Hiring, But Promise No Layoffs
Snap's Hardware Division is Impacted by the Layoff
Aside from the already mentioned departments, Snap's hardware division will also be impacted by the layoff.
The department responsible for its AR Spectacles glasses and the Pixy camera drone will also suffer from the impending layoff. It can be recalled that recently, Pixy camera drone was scrapped after being on sale for just a few months.
In addition, Snap's ad sales organization will also undergo restructuring as two of the company's top executives, Chief business officer Jeremi Gorman and VP of sales Peter Naylor, are moving to Netflix to run the ads for the streaming service.
Amid the issues on the impending layoff, Russ Caditz-Peck, the spokesperson of Snap, did not issue any comment regarding the matter.
Following the aggressive trends of tech companies' hiring during the pandemic, Snap hired 3,427 full-time employees as of March of 2020. During the last quarter of the year, it already have 6,446 employees.
In May 2021, Snap acquired WaveOptics, the supplier of the AR displays used in its latest Spectacles. This is the company's biggest acquisition for more than $500 million.
Snap has 347 million daily users, a number which is greater that Twitter's. However despite of the continues growth of its user base, the company has managed to make a profit only one since it went public in 2017.
In 2018, Snap also issued a mass job cuts. About 220 employees were laid off in March of that year.
Related Article: Snap Will Reportedly Lay Off Employees Following Q2 Earnings Results
